How Taxes Affect Retirement Savings (and What You Can Do About It)

When people think about planning for retirement, they tend to focus on saving and investing so they have a good nest egg when they leave work. And that’s a good starting point. But it’s also important to pay attention to the impact of taxes on your retirement savings and any other sources of income you’ll draw upon in retirement.

Unfortunately, taxes don’t go away when you stop getting a paycheck. Even if you are no longer working, you will still earn income in the form of retirement account distributions, Social Security benefits, and possibly pension payments. And if you underestimate the impact taxes can have – yes, even when you’re retired – you could end up losing a significant chunk of your hard-earned cash.

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